Business-school rankings

The year of listing differently

The more the rankings differ, the less attention they receive

FOR the first time ever, a non-American institution has topped one of the leading rankings of business schools—the purveyors of the MBAs that are meant to be passports to a corner office and a six-figure salary. Heading the global ranking of business schools in the latest edition of “Which MBA?”, published this week by the Economist Intelligence Unit (EIU), a sister organisation of this newspaper, is IESE Business School, an arm of the University of Navarre with campuses in Barcelona and Madrid (see table). In last year's EIU ranking, the first four schools were American; IESE was ninth.

The cream of such rankings is usually a coterie of six or seven American business schools. Among these are Harvard Business School (HBS) and the Wharton School at the University of Pennsylvania in Philadelphia. This year, however, neither of these schools features in the EIU's list. This is not because they do not merit inclusion (last year they were fourth and eighth respectively). It is because they have chosen not to give the EIU access to the sources it needs to make its rankings.

The EIU's list is based on a number of criteria, but it relies heavily on students' assessments of their educational experience. In order to ask students their opinion it needs access to the schools' records, and it is here that HBS and Wharton have put their feet down. Arguing that it is a breach of their students' privacy, they have refused to hand over their contact details.

IESE topped the EIU's list because it scored particularly well in two categories: opening new career opportunities, and the starting salaries of its new graduates (their average—of $142,000—was higher than that at any American school). The Wall Street Journal's ranking, also published this week, relies solely on recruiters' on-campus experience. Since it takes no account of students' views, it continues to rank HBS and Wharton—which came in 14th and 6th respectively in its latest listing of American schools. The Wall Street Journal's top American choice was the Tuck school at Dartmouth College, which the EIU ranked third. But the Journal is much less impressed by IESE, which it ranks 19th globally.

Julia Tyler, associate dean of the MBA course at London Business School (which features highly in most lists, but not in the EIU's), points out that the interests of recruiters and students are not identical. Recruiters favour schools that provide a reliable stream of recruits; students want schools where they get the most job offers. Partly as a result, the EIU's and the WSJ's lists differ hugely.

Schools also complain that the proliferation of lists, since BusinessWeek launched the first in 1988, has left some staff working two to three days a week gathering information for the compilers. There are now so many business-school lists that they, too, probably deserve a ranking. Any top ten would include the EIU, the Financial Times, Forbes, US News & World Report and the Wall Street Journal.

Patrick Harker, the dean of Wharton, who made the first decision not to co-operate with the listmakers, also argues that “the ranking methodologies are severely flawed.” When asked by what criteria he would like his school to be judged, Kim Clark, who was the dean of HBS until the end of July, said “the achievement of its alumni”. But that is a lagging indicator. It might not make sense to choose HBS today just because its students of 30 years ago are now running many big companies.

The EIU is not the first to have been affected by the two schools' decision. The Financial Times (which owns 50% of The Economist) was unable to include them in its ranking of the best providers of executive-education programmes, which it published in May. This was despite the fact that Wharton and HBS had tied for first place in the FT's ranking of MBAs, published in January. The headline to the newspaper's article accompanying that listing read, “Two leaders leave the rest of the pack trailing”. (IESE came 12th in the FT's listing.)

And therein lies a dilemma. HBS and Wharton have such high reputations in the field that they have little to gain by appearing anywhere other than at the very top of the lists. HBS has the Harvard name, an influential journal (the Harvard Business Review) and a powerful publishing house (Harvard Business School Press) to sustain its reputation. Wharton has an online journal (knowledge@wharton) that is the envy of every other school, and a book published last month (“The Running of the Bulls: Inside the Cut-throat Race from Wharton to Wall Street”) that helps to propagate the carefully cultivated idea that to rise to the highest floors on Wall Street, you must first spend a couple of years in Philadelphia. The two schools say they have no intention of changing their minds. But Wharton, in particular, may feel some pressure to restore the “buzz” that the listings can generate.

Culture shock

The listings are all produced by media organisations whose primary purpose is to entertain their readers. But they also aim to inform potential students of the merits of different courses. The EIU's “Which MBA?” includes copious details of the schools' features. Its ranking list is little more than a device to catch the potential reader's attention.

“Rankings are here to stay”, says Matt Symonds, whose company, QS, runs a website (www.topmba.com) that helps students to compile their own list of “best” schools. In the absence of a single incontrovertible measure of performance, the rankings provide a degree of accountability in an educational niche where there is too little. Mr Symonds's surveys show, however, that the more the lists proliferate and differ, the less attention students pay to them.

Choosing a place to study an MBA is a complicated decision that depends on a wide range of factors including geography, price and reputation. The listings, and the information that they distil, can help a student with that choice. There are plenty of things, however, that they cannot convey. None of the EIU's criteria, for instance, captures the distinctive culture of IESE. The institution is run by Opus Dei, a controversial Catholic order founded in the last century, and its professor of business ethics is a Roman Catholic priest.